Exxon-Mobile makes commitment to refining light crude with expansion of Beaumont facility

Fuel Fix:

Exxon Mobil began construction today on an expansion to its refinery in Beaumont, Texas, after reaching a final investment decision.

The expansion, expected to start-up up in 2022, will increase the refinery's capacity by 250,000 barrels per day — equivalent to a 65 percent increase in current capacity. When complete, the refinery will be among the nation's largest.

From HoustonChronicle.com: Oil majors prepare refineries for West Texas crude

Exxon Mobil previously announced that it was in the midst of planning for the additional unit, which will allow it to process light crude. Most refineries in the Gulf can only process heavy crude, which typically comes from Venezuela and Canada. As more oil flows in from the booming Permian Basin of West Texas, that isn't helpful, as the oil there is light.

"The Beaumont refinery is strategically positioned to benefit from Permian production growth," said Bryan Milton, president of Exxon Mobil Fuels and Lubricants Company in a statement.

This is the third crude unit within the facility, which currently has the capacity to refine 366,000 barrels per day of crude oil. Exxon Mobil already has a large presence in the Beaumont area, employing 2,100 employees, according to the company. The company, headquartered in Irving, Texas, expects to create 1,850 jobs during construction of the expansion and add 40-60 jobs in the area once it is complete.
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This is an important move for US energy security.  As the current crisis in Venezuela demonstrates, it is a mistake to rely on that country for the heavy crude currently used by many refineries on the Gulf Coast.  While Citgo which is owned by Venezuela is unlikely to make the switch, it would make sense for all of the majors to convert to processing light crude rather than just using it to dilute the heavy crude imports.  Chevron and Valero are also looking to increase their use of the light crude from the shale wells in Permian Basin.

The conversion could probably be speeded up if the companies were not having to waste money on ethanol mandates.